Bush to Repeal Steel Tariffs
The Washington Post is reporting that Bush has decided to repeal the steel tariffs. Given the growing crowd of countries that had recently announced that they would retaliate by putting tariffs on US products (as noted by AB in this post), I’m not surprised. As I argued in another earlier post, I think that the Bush administration will use the WTO ruling and the threat of retaliation by the US’s trading partners as political cover to do something that many in the administration have been wanting to do anyway.
From the WaPost story:
The Bush administration has decided to repeal most of its 20-month-old tariffs on imported steel to head off a trade war that would have included foreign retaliation against products exported from politically crucial states, administration and industry sources said yesterday. The officials would not say when President Bush will announce the decision but said it is likely to be this week…
Bush advisers said they were aware the reversal could produce a backlash against him in several steel-producing states of the Rust Belt — including Pennsylvania, West Virginia and Ohio. That arc of states has been hit severely by losses in manufacturing jobs and will be among the most closely contested in his reelection race.
I particularly liked this line in the story, though:
The sources said that Bush’s aides agonized over the options to present to the president and that they considered it one of the diciest political calculations of this term.
Notice that it was a political calculation, not an economic one. Of course all presidents make decisions based on politics, but no administration that I can think of has made economic decisions so exclusively based on political calculus rather than economic concerns.